An ace restaurant serving traditional Czech grub, U Seturu has a lovely cosy cellar feel about it with some brilliant black and white photographs of the city on the walls. The Goulash in particular is some of the est you'll find anywhere, and the best thing about it is the price: around 200 K per person for a slap up nosh and a glass of beer. They also have an even cheaper (and no less delicious) lunch menu.
Address: Palackeho 2, a little road running between the main streets of Jungmannova and Vodickova in the New Town (Nove Mesto). It is next door to a hotel. There is a tram stop where these two roads meet. Nearest station is Mustek.
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